Targeted Chemotherapy
Revolutionizing Cancer Treatment
Tired of hearing about AI. Let me remind you that innovation also takes place elsewhere. Today, let’s dive into targeted chemotherapy—a rapidly growing field. Perhaps this piece will lead you to reconsider investments in the pharmaceutical sector, an area of the market that has taken a beating in recent years.
Total addressable market
In oncology, the total targeted therapy market is approximately $86 billion, and is projected to grow 7% annually, reaching over $163 billion by 2035. The growth is, in large part, fueled by innovation in antibody-drug conjugates (ADCs). ADCs are smart cancer medicines that combine an antibody with a powerful cell-killing drug. The antibody finds cancer cells and delivers the drug directly to them, killing only the bad cells while sparing healthy ones. This focused approach reduces side effects and boosts effectiveness. When the cell-killing drug is a chemo, we speak of a targeted chemotherapy.
Targeted chemotherapy is a small and novel segment within the ADC area. However, we can now call it part of the overall growth story, given that we have recently seen several successful launches with good sales numbers. So, despite starting from a small base, its potential is huge, with the market for targeted chemotherapy drugs forecasted to reach $10 billion within the next decade. Since it is such a small area, it is also possible to study in isolation and subsequently write about it in an essay form, as I try to do here.
Main Players
Several companies are active in the targeted chemotherapy space. However, AbbVie, Pfizer, and AstraZeneca are the main players. These companies have approved drug therapies in the marketplace. In addition to having a rich oncology pipeline centered upon ADCs.
AbbVie
AbbVie leads with two diverse chemo ADCs, Elahere and Emrelis, targeting cancers marked by folate receptor alpha and c-Met proteins. Among the two drugs, Elahere is approved for the treatment of ovarian cancer, while Emrelis is approved as a drug for non-small cell lung cancers. Elahere is the oldest of the two, and is also the drug with the highest sales figure. In the second quarter of 2025, AbbVie reported global Elahere net revenues of $159 million, marking a 24.2% increase from the previous quarter. Analysts project that Elahere could achieve global sales of approximately $750 million in 2025, given recent quarterly growth and ongoing adoption in ovarian cancer treatment. Going forward, the drug is expected to be a key growth driver for AbbVie’s oncology division, with the global market for Elahere expected to surge to over $1.7 billion by 2029 and potentially reaching $6 billion by 2034 if adoption continues and additional indications are secured.
Emrelis has just recently launched, and the sales are too young to be reported on a standalone basis. However, analysts forecast its global sales to reach between half a billion and one billion US dollars by 2029.
Pfizer
Bolstered by the $43 billion acquisition of Seagen in 2023, Pfizer has expanded its ADC portfolio, positioning itself as an oncology powerhouse. Seagen has developed four relevant drugs: Adcetris, Padcev, Turkysa, and Tiivdak. These drugs combine targeted delivery with potent chemotherapy agents and have collectively generated around $1.5 billion in revenue in the first half of 2025 alone. Pfizer also has a robust ADC pipeline building on Seagen’s innovation, making targeted chemotherapy a strategic and growing part of Pfizer’s oncology business. It’s difficult to assign a precise value to Seagen’s research portfolio, but given that its four leading targeted chemotherapy drugs could collectively generate over $6 billion in sales by 2029, the value is undoubtedly substantial.
AstraZeneca
AstraZeneca is a major player in ADCs and targeted therapies, with several high-profile drugs on the market. Chemotherapy drugs include Enhertu (in collaboration with Daiichi Sankyo) for breast, gastric, and lung cancers, as well as CFTX-1554, MEDI2228, and others in early to mid-stage development.
Enhertu works like a “smart bomb” for cancer treatment. It targets cancer cells that display a protein called HER2 on their surface. Once it finds these cells, Enhertu latches on and delivers a potent chemotherapy (deruxtecan) directly inside the cancer cell. This chemotherapy is then released, damaging the DNA of the cancer cell, and subsequently kills it.
As for sales, Enhertu generated about $2.5 billion in worldwide revenue in 2024 and is projected to continue growing rapidly due to expanding approvals in breast, lung, and other solid tumors.
Conclusion - My Top Pick
Pfizer’s oncology portfolio, significantly enhanced by its acquisition of Seagen, is indeed impressive. However, Pfizer is a large company that requires multiple blockbuster drugs to drive total revenues up substantially. While the Seagen acquisition adds promising assets, it will take some time before these contributions boost Pfizer’s overall revenue figures. Ultimately, Pfizer is on track to become a powerhouse in oncology, but timing is crucial for investors; investing too early based on anticipated future growth carries the risk that the expected returns may take longer to materialize than originally expected..Being too early can be a costly endeavour in the stock market.
I have long been an admirer of AstraZeneca as a quality company, positioned as a market leader in cancer treatments. Nevertheless, I have never been able to buy the company below its intrinsic value, as it tends to be steeply priced. If you look at the returns in a one-year perspective, the return isn’t much higher than 10%. However, AstraZeneca has an awesome oncology portfolio with drugs like Tagrisso, Imfinzi, Calquence, Enhertu, and Truqap, which look well-positioned to drive cash flow gains over the next decade. I have to take a renewed look at the company.
AbbVie is my largest position within the healthcare sector, and it has proven to be a strong performer with a 20% return over the past year. What makes AbbVie particularly interesting is that oncology currently represents only a small portion of its overall revenue—about $1.7 billion in Q2 2025 out of total revenues exceeding $15 billion. However, as we have seen, the company has launched two targeted chemotherapy drugs and has a broad ADC pipeline ready to drive future growth. Oncology is one of several growth engines AbbVie can fire up to generate accelerated growth, and for this reason, it is one of my top portfolio holdings. That said, given the recent surge in its share price, AbbVie can no longer be considered undervalued at this point.
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